The following is an op-ed by Nick Bourne. He is Chief Commercial Officer at Copa90, the 2016 Webby award winning best online sports channel focused exclusively on football / soccer. Nick has been with Copa90 for four years, part of the leadership team that has taken it from a YouTube channel to a global multi platform media network. Prior to Copa90, Nick was in the Corporate Development and M&A team at News Corp, scaling digital businesses in the portfolio, from online fashion retail to digital publishing, gaming and gambling; and before that a strategy consultant with Deloitte. He holds an MBA from London Business School / Berkeley but tries not to use it. He’s on Twitter @npwb but tends to keep his thoughts to those close around him other than the odd article like this.
The recent acceleration in ESPN’s subscriber decline has prompted speculation in the press that in five years’ time, ESPN will not be able to recoup the investment from buying its existing sports rights portfolio through its subscription revenue. So, if not broadcasters like ESPN, which businesses will be in a position to buy sports rights in the future?
We are witnessing a shift in power away from the businesses that built the sports rights market towards those with distinctly different models – digital platforms. Step forward Amazon, Facebook, Google, Apple and Tencent.
Only tech giants own the customer
In these times, nobody truly “owns” the customer in the same way digital platforms do. Everybody else just rents for a time, or acts as a rep for these platforms.
This customer “ownership” is another way of describing data and its value. These platforms use data to drive value in different parts of their business, from better ad sales on Facebook, to higher basket sizes through suggestions on Amazon.
These platform businesses have a global customer base to sell the assets they acquire on to, so their investments go further. A case in point being Amazon’s ability to rationalise the cost of buying the Top Gear stars.
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Also, with digital platforms, customers pay for or spend time with their services out of choice. Other services which aren’t of any value are not bundled in to “fill out” what a customer is paying for, especially when they’re paying with their time. There’s no greater expression of this than Google’s single search box design. They deliver only what you want.
ESPN has commanded a premium for its sports rights, but then made further commercial value from other related offerings that don’t drive value but that audiences have to pay for in order to get what they really want. The unbundling that modern consumers demand will continue to cut swathes through the cost bases of traditional media companies.
What does this mean for the fans?
Things are probably going to be better for audiences, and in a number of ways.
Most importantly, the “rights product” itself (i.e. the game with its incremental viewing improvements each year) will still get made because the rights owner will still get paid, so there will be games to watch. But crucially they will be more convenient to watch with these new platform owners.
Then there’s price. If you want the football, or just EPL or MLS, then you will be able to pay for just that. You will no longer have to pay for football from other leagues you have no interest in. So it should be cheaper, or at least feel like better value.
Why the smart money is on Amazon
Of the all the platforms in the running, I would bet on Amazon to win out on sports rights. Amazon is on every device and platform, able to offer every content type using every commercial model out there from free to ad-supported and TVoD.
Amazon also plays a very long game – and that’s what’s needed. Right now the platform is talking about the long tail of sports, which it will use to refine things. One day soon it will pick up a major sports rights package, and this won’t even cause its balance sheet to skip a beat (unlike all the old model guys who currently bid for rights).
Amazon also knows more about its users at critical points. It knows what they look for and what they actually buy. Amazon was able to make such a confident bid for Top Gear because it has the global data on who has looked at (let alone bought) everything from a Top Gear pencil case to Jeremy Clarkson’s last book.
But it’s not in the bag just yet. Disney (ESPN’s owner) won’t make this a cake walk for anyone, especially if the murmurings of a Netflix tie up turn out to be true. Let the battle commence.